SIE practice questioneasyPolitical Contributions / Pay-to-Play
FINRA Rule 2030 (pay-to-play) applies to which type of business?
- ADistribution of government investment contracts to covered investment pools✓ Correct answer
- BRetail brokerage services to individual investors
- CSales of municipal securities only
- DInvestment banking activities with corporate clients
Explanation
Why A — Distribution of government investment contracts to covered investment pools
FINRA Rule 2030 is a pay-to-play rule that restricts covered members from engaging in distribution or solicitation activities for compensation with a government entity on behalf of a covered investment pool (such as a public pension fund) for two years after a political contribution to an official of that government entity. This is similar to MSRB Rule G-37 but applies to the distribution side of investment management rather than municipal securities underwriting. MSRB G-37 covers municipal securities dealers specifically.
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